Abstract

[Introduction]. With the Open Method of Coordination (OMC), the European Union added a new mode of governance to existing policy-making instruments. Instead of introducing joint competencies, the OMC consists of multilateral surveillance of national policies. Supporters of the OMC claim that it was developed to reconcile legitimacy with effectiveness since it takes into account the diversity of national welfare states while facilitating trans-border policy learning. In contrast, this paper seeks to show that EU member states mainly use soft law in response to substantive disagreements. This mirrors earlier developments of the OECD and the IMF, where multilateral surveillance was also introduced to resolve deadlocks. In each case, member states opted for a non-binding procedural solution to overcome competing visions of the organizations’ purposes. Hence international organizations select soft law less for its effectiveness than for its capacity to foster compromises. Based on case studies, this paper juxtaposes the inauguration of soft coordination in the OECD, the IMF and the EU during the 1960s, 1970s and 1990s respectively. In all cases member states opted for soft law in times of ‘institutional crisis’ when more substantial agreements proved unattainable. As shown elsewhere, soft law policy coordination in the European Union shares many features with multilateral surveillance of the OECD and the IMF (Schäfer 2004). Hence we can obtain a broader view on why soft law was introduced to the EU by also looking at its origins in these organizations. A central argument of this paper is that existing approaches fail to convincingly explain the choice of soft law. They are much better at understanding harder forms of delegation and legal integration. Before we proceed, we have to clarify the notion of “soft law.” In general, we use it if there are neither binding rules nor sanctions to enforce compliance. In terms of the concept of legalization (Abbott et al. 2000), soft law scores low both on obligation and delegation but sometimes can be quite precise. More specifically, we stick to the following definition of soft law: “Rules of conduct that are laid down in instruments which have not been attributed legally binding force as such, but nevertheless may have certain (indirect) legal effects, and that are aimed at and may produce practical effects”(Senden 2004: 112, emphasis deleted). The paper is organized as follows. Section 2 looks at possible theoretical explanations for the choice of soft law. Recent contributions in the principal-agent framework are a good starting point to trace the question when governments decide to delegate or pool sovereignty. Since delegation always goes along with agency losses – principals cannot completely control agents – governments shy away from it if there is policy conflict. Based on this insight, section 3 offers a historical reconstruction of the introduction of soft law, in this case procedures of multilateral surveillance, in the OECD, the IMF, and the EU. Section four concludes.